In a week when all eyes are on Facebook and the subject of how data about us on social media platforms gets used without us knowing, there’s been some consolidation afoot in the world of media-based big data services. DataSift, the London-based company that pulls data from conversations across social, news and blog platforms, anonymises it, and then parses it for insights for third party organizations, is being acquired by Meltwater, the company originally out of Norway but now based in San Francisco that provides business intelligence services such as media monitoring and AI analytics on internal business communications.

Financial terms are not being disclosed for the deal but it includes technology, employees and DataSift’s customer base. DataSift had raised about $72 million in funding from investors that include Insight Venture Partners, Scale Ventures and Upfront Ventures and the company had never disclosed its valuation. Meltwater is bootstrapped and has never raised outside funding, but it has also been described as a “unicorn” with a billion-dollar valuation — a description that the company would not confirm but also does not contest.

DataSift’s CEO Tim Barker, who is taking on a role at Meltwater leading his team there, said that it’s business as usual for DataSift’s existing customers, while the two will also work on integrating their platforms together. Combined, the customer base includes media companies, brands and educational and other organizations that make use of the data. Disclosed customer names include Viacom, Ogilvy, Air France, Vans, Harvard Business School and Columbia Business School.

The news comes at an interesting time in the world of social media, and more specifically the data that swirls around it. Over the weekend, we saw a huge story break about how the analytics firm Cambridge Analytica was involved in what has amounted to a data scandal: an affiliate working with the firm had used an innocuous-looking research survey to in turn tap into the social graphs and the related data of respondents, by way of Facebook’s API, netting tens of millions of profiles in the process. The fallout is likely to be felt for a long time to come, and may well bring about a new kind of regulation and scrutiny over how personal data is harnessed and used in social networks.

While this is raising a lot of questions already about personal data and social media, DataSift and Meltwater, to be clear, sit at a different section of the data and media continuum. While Meltwater focuses on what’s produced either internally at a business, or by publications and other media companies, DataSift’s currency is the movement of information that’s already being put out onto social networks in public posts, rather than personal details or attributes of users. As Barker describes it, the company has taken an approach that it calls “privacy by design,” in which it works only with anonymised data to reach its insights, and that work is not focused on how to use that data to rebuild profiles or “types” that can be used to match people back up with ads or other marketing.

The idea will be to bring that together with Meltwater’s existing business to enhance it.

“By combining advances in machine learning and the vast amount of publicly available information on the internet, you can today understand and track Porter’s Five Forces,” — a framework for analysing a business’ competitors — “in real time to understand strategic opportunities and threats for your business. Executives that take advantage of this new opportunity create an unfair information advantage over those who don’t,” said Jorn Lyseggen, CEO and founder of Meltwater in a statement.

“DataSift has built a scalable platform that lets developers build data science-driven insights from social firehoses while protecting the privacy of an individual’s data. When combined with the data Meltwater captures and our AI capabilities, developers can disrupt the Business Intelligence space by either building new applications or complementing existing ones with unique signal that can be only derived from external data.”

All the same, it will be interesting to see what the effects are on businesses like these. For one, DataSift currently is built on the cooperation (and by the grace) of social networks — by way of APIs and access to firehoses of data that DataSift and companies like it use to feed their analytics engines. Whether the social media companies decide they would like to try their hands at some of that business themselves, or perhaps get told by regulators that they simply can no longer share information in this way, this leaves companies that are built on that access in a precarious position.

And that’s before you consider the effects of existing legislation like GDPR, which Meltwater says is something the company is built to handle.

“DataSift’s advanced analytics platform is a great compliment to what we have in house, at a time of growing privacy concerns and regulation such as GDPR,” said Aditya Jami, Senior Director of Engineering and Head of AI at Meltwater. “DataSift’s technology will be instrumental… to deliver next generation insights.”

DataSift in its past had a very notable instance of getting cut off from one of those feeds, and feeling the strong after effects: after years of working closely together and being the main users of Twitter’s firehose of Tweets — access that was brokered when DataSift handed over to Twitter the first third-party website “retweet” button to Twitter, created when DataSift was called TweetMeme — Twitter cut off DataSift from its firehose in the wake of a move to beef up its own big-data analytics business.

DataSift eventually regrouped and now works with around 15 partners, including Facebook, LinkedIn and WordPress, but given that its original premise was based around the kind of real-time data that Twitter uniquely provides, it was a big shift for the startup.

Meltwater has had its own scuffles in the past with the third-party services it relies on to make the wheels of its business model turn. Both have moved on from those more spiky years, it seems.

Fast forward to today, the combination of Meltwater and DataSift makes some sense when you think about the evolution of media. The rise of social networking has created another playing field for businesses: they now have a new set of platforms where they can pick up chatter about themselves, and it’s become the hot new place to communicate with customers.

Whether Facebook wants to admit it or not, social networking has become the modern-day descendent of the old-school media industry, and this is one aspect of that. While DataSift was built on trying to better harness and parse chatter from the former, Meltwater was built on the back of media monitoring to essentially provide the same services on the latter.

British startup Made.com says that “a new tier 1 global institutional investor” has made an important investment commitment in the furniture company. This mysterious investor is willing to lead a new $56 million round (£40 million) with existing investors Partech Ventures, Level Equity and Eight Roads Ventures also participating.

It sounds like the funding round isn’t finished just yet, so Made.com could end up raising more than that.

More interestingly, the company has shared some details about its balance sheet. In 2017, the company has been profitable in the U.K., France, Belgium, the Netherlands and Luxembourg. And if you take into account the entire company in all countries where it operates, Made.com is currently cashflow positive.

In 2017, the company has generated a net revenue of $178 million (£127 million), which represents a 40 percent increase compared to 2016. So it sounds like Made.com is on the right path to profitability.

And that’s why the company also announced that Adrian Evans is joining the company as CFO. He previously worked at Yoox Net-A-Porter. This release sounds like Made.com is now optimizing the company for a potential IPO.

The company sells quality furniture at an affordable price. Made.com wants to disrupt high-end furniture stores by controlling everything from manufacturing to the e-commerce platform. This way, the company doesn’t have to pay as many middle players and can offer cheaper prices.

As e-commerce is also becoming the norm, it fosters competition with furniture giants, such as IKEA. Going to Made.com’s website is as easy as going to IKEA’s website after all.

Alibaba is increasing its control of Lazada, its e-commerce marketplace in Southeast Asia it acquired control of in 2016, after it injected another $2 billion into the business and replaced its CEO with a long-standing Alibaba executive.

Alibaba’s first investment came in April 2016 when it bought 51 percent of Lazada for $1 billion, and it added another $1 billion last summer to increase its equity to around 83 percent. With today’s news, Alibaba has invested $4 billion to date which it said will “accelerate the growth plans” and help further tie the Lazada business into Alibaba’s core e-commerce service.

Peng, who is one of Alibaba’s original 12 founders, has been Chairwoman of Lazada and is executive chairman of Ant Financial, Alibaba’s fintech affiliate company. Bittner will remain involved as “senior advisor to Alibaba Group” and apparently involved in future strategy, including further international expansion opportunities.

Alibaba hasn’t just limited its Southeast Asia approach to backing Lazada. The firm also invested $1.1 billion in Tokopedia which competes with Lazada in Indonesia, Southeast Asia’s largest economy and the world’s fourth most populous country.

There’s a new twist in the BroadQualm saga this afternoon as Qualcomm has said it won’t renominate Paul Jacobs, the former executive chairman of the company, after he notified the board that he decided to explore the possibility of making a proposal to acquire Qualcomm.

The last time we saw such a huge exploration to acquire a company was circa 2013, when Dell initiated a leveraged buyout to take the company private in a deal worth $24.4 billion. This would be of a dramatically larger scale, and there’s a report by the Financial Times that Jacobs approached Softbank as a potential partner in the buyout. Jacobs is the son of Irwin Jacobs, who founded Qualcomm, and rose to run the company as CEO from 2005 to 2014. Successfully completing a buyout of this scale would, as a result, end up keeping the company that his father founded in 1985 in the family.

“I am glad the board is willing to evaluate such a proposal, consistent with its fiduciary duties to shareholders,” Jacobs said in a statement. “It is unfortunate and disappointing they are attempting to remove me from the board at this time.”

All this comes following Broadcom’s decision to drop its plans to try to complete a hostile takeover of Qualcomm, which would consolidate two of the largest semiconductor companies in the world into a single unit. Qualcomm said the board of directors would instead consist of just 10 members.

“Following the withdrawal of Broadcom’s takeover proposal, Qualcomm is focused on executing its business plan and maximizing value for shareholders as an independent company,” the company said in a statement. “There can be no assurance that Dr. Jacobs can or will make a proposal, but, if he does, the Board will of course evaluate it consistent with its fiduciary duties to shareholders.”

Broadcom dropped its attempts after the Trump administration decided to block the deal altogether. The BroadQualm deal fell into purgatory following an investigation by the Committee on Foreign Investment in the United States, or CFIUS, and then eventually led to the administration putting a stop to the deal — and potentially any of that scale — while Broadcom was still based in Singapore. Broadcom had intended to move to the United States, but the timing was such that Qualcomm would end up avoiding Broadcom’s attempts at a hostile takeover.

BroadQualm has been filled with a number of twists and turns, coming to a chaotic head this week with the end of the deal. Qualcomm removed Jacobs from his role as executive chairman and installed an independent director, and then delayed the shareholder meeting that would give Broadcom an opportunity to pick up the votes to take over control of part of Qualcomm’s board of directors. The administration then handed down its judgment, and Qualcomm pushed up its shareholder meeting as a result to ten days following the decision.

“There are real opportunities to accelerate Qualcomm’s innovation success and strengthen its position in the global marketplace,” Jacobs said in the statement. “These opportunities are challenging as a standalone public company, and there are clear merits to exploring a path to take the company private in order to maximize the company’s long-term performance, deliver superior value to all stockholders, and bolster a critical contributor to American technology.”

It’s not clear if Jacobs would be able to piece together the partnerships necessary to complete a buyout of this scale. But it’s easy to read between the lines of Qualcomm’s statement — which, as always, has to say it will fulfill its fiduciary duty to its shareholders. The former CEO and executive chairman has quietly been a curious figure to this whole process, and it looks like the BroadQualm saga is nowhere near done.

Zuora, which helps businesses handle subscription billing and forecasting, filed for an initial public offering this afternoon following on the heels of Dropbox’s filing earlier this month.

Zuora’s IPO may signal that Dropbox going public, and seeing a price range that while under its previous valuation seems relatively reasonable, may open the door for coming enterprise initial public offerings. Cloud security company Zscaler also made its debut earlier this week, with the stock doubling once it began trading on the Nasdaq. Zuora will list on the New York Stock Exchange under the ticker “ZUO.” Zuora CEO Tien Tzuo told The Information in October last year that it expected to go public this year.

Zuora’s numbers show some revenue growth, with its subscriptions services continue to grow. But its losses are a bit all over the place. While the costs for its subscription revenues is trending up, the costs for its professional services are also increasing dramatically, going from $6.2 million in Q4 2016 to $15.6 million in Q4 2017. The company had nearly $50 million in overall revenue in the fourth quarter last year, up from $30 million in Q4 2016.

But, as we can see, Zuora’s “professional services” revenue is an increasing share of the pie. In Q1 2016, professional services only amounted to 22% of Zuora’s revenue, and it’s up to 31% in the fourth quarter last year. It also accounts for a bigger share of Zuora’s costs of revenue, but it’s an area that it appears to be investing more.

Zuora’s core business revolves around helping companies with subscription businesses — like, say, Dropbox — better track their metrics like recurring revenue and retention rates. Zuora is riding a wave of enterprise companies finding traction within smaller teams as a free product and then graduating them into a subscription product as more and more people get on board. Eventually those companies hope to have a formal relationship with the company at a CIO level, and Zuora would hopefully grow up along with them.

Snap effectively opened the so-called “IPO window” in March last year, but both high-profile consumer IPOs — Blue Apron and Snap — have had significant issues since going public. While both consumer companies, it did spark a wave of enterprise IPOs looking to get out the door like Okta, Cardlytics, SailPoint and Aquantia. There have been other consumer IPOs like Stitch Fix, but for many firms, enterprise IPOs serve as the kinds of consistent returns with predictable revenue growth as they eventually march toward an IPO.

The filing says it will raise up to $100 million, but you can usually ignore that as it’s a placeholder. Zuora last raised $115 million in 2015, and was PitchBook data pegged the valuation at around $740 million, according to the Silicon Valley Business Journal. Benchmark Capital and Shasta Ventures are two big investors in the company, with Benchmark still owning around 11.1% of the company and Shasta Ventures owning 6.5%. CEO Tien Tzuo owns 10.2% of the company.

It was a big debut for enterprise cloud security company Zscaler, which saw its shares skyrocket 106% on its first day of trading. After pricing at $16, shares opened at $27.50, and closed at $34.

This was also well above the original expected price range for its IPO of $10 to $12. The company ultimately raised $192 million. In other words, there was significantly better-than-expected demand for Zscaler.

Zscaler works with enterprises and says it counts 200 of the Forbes Global 2000 companies as customers. In an interview with TechCrunch, CEO Jay Chaudhry described the business as “the platform which was built in the cloud for the cloud.”

He went on to explain that his business was designed to help companies stay secure with a transient workforce. “We want to work from a hotel, airplane, coffee shop,” said Chaudhry. “The data center is no longer the center of the universe.”

But Zscaler is not yet profitable. For its fiscal 2015, revenue was $53.7 million, 2016 grew to $80.3 million and 2017 saw $125.7 million. Net losses were $12.8 million, $27.4 million and $35.5 million in 2015, 2016 and 2017, respectively.
Zscaler listed on the Nasdaq, under the ticker, “ZS.”

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This week Katie Roof and I were joined by Mayfield Fund’s Navin Chaddha, an investor with early connections with Lyft to talk about, well, Lyft — as well as two bombshell news events in the form of an SEC fine for Theranos and Broadcom’s hostile takeover efforts for Qualcomm hitting the brakes. Alex Wilhelm was not present this week but will join us again soon (we assume he was tending to his Slayer shirt collection).

Starting off with Lyft, there was quite a bit of activity for Uber’s biggest competitor in North America. The ride-sharing startup (can we still call it a startup?) said it would be partnering with Magna to “co-develop” an autonomous driving system. Chaddha talks a bit about how Lyft’s ambitions aren’t to be a vertical business like Uber, but serve as a platform for anyone to plug into. We’ve definitely seen this play out before — just look at what happened with Apple (the closed platform) and Android (the open platform). We dive in to see if Lyft’s ambitions are actually going to pan out as planned. Also, it got $200 million out of the deal.

Next up is Theranos, where the SEC investigation finally came to a head with founder Elizabeth Holmes and former president Ramesh “Sunny” Balwani were formally charged by the SEC for fraud. The SEC says the two raised more than $700 million from investors through an “elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.” You can find the full story by TechCrunch’s Connie Loizos here, and we got a chance to dig into the implications of what it might mean for how investors scope out potential founders going forward. (Hint: Chaddha says they need to be more careful.)

Finally, BroadQualm is over. After months of hand-wringing over whether or not Broadcom would buy — and then commit a hostile takeover — of the U.S. semiconductor giant, the Trump administration blocked the deal. A cascading series of events associated with the CFIUS, a government body, got it to the point where Broadcom’s aggressive dealmaker Hock Tan dropped plans to go after Qualcomm altogether. The largest deal of all time in tech will, indeed, not be happening (for now), and it has potentially pretty big implications for M&A going forward.

That’s all for this week, we’ll catch you guys next week. Happy March Madness, and may fortune favor* your brackets.

Sweden-based Detectify, which offers a website vulnerability scanner that is in part powered by the crowd, has raised €5 million in new funding. The round was led by New York-based venture capital and private equity firm, Insight Venture Partners. Existing investors, Paua Ventures and Inventure, also participated.

Founded in late 2013 by a self-described group of “white-hat hackers” from Sweden, the now 20-person strong company offers a website security tool that uses automation to scan websites for vulnerabilities to help customers (i.e. developers) stay on top of security. The more unique part of the service, however, is that it is in part maintained — or, rather, kept up to date — via the crowd in the form of Detectify’s ethical hacker network.

This sees top-ranked security researchers submit vulnerabilities that are then built into the Detectify scanner and used in customers’ security tests. The really clever part is that researchers get paid every time their submitted module identifies a vulnerability on a customer’s website. In other words, incentives are always kept aligned, giving Detectify a potential advantage and greater scale compared to similar website security automation tools.

“Companies are building applications and users happily enter their data into these applications, but the applications are built from mix of technologies that are changing rapidly (open source, plugins, funky js-frameworks), without a clear vendor “responsible” for the security,” says Detectify co-founder and CEO Rickard Carlsson, explaining the problem the startup set out to solve.

“As no clear vendor is responsible for communicating about security [as compared to a Windows patch, for example], the knowledge sits in the community. We wanted to build a platform that takes the knowledge from white-hat and supercharges it with automation”.

Put more simply, developers typically have a long backlog of things to do and security testing often “falls between the cracks” because of limited time. It’s also near-impossible for any single developer to manually security test their code while keeping up with the latest vulnerabilities. By using automation, the wisdom of the crowd, and via integrations with popular developer tools, Detectify aims to help catch security issues before every new release and as part of a developer’s normal workflow.

To that end, Detectify already counts customers spanning a range of industries and company sizes, including Trello, Le Monde, and King. “It might have been easier to target a specific segment but we have a land and expand strategy. We also aim to make the internet a safer place, hence we want to offer our solution to organisations of all sizes,” says Carlsson.

Meanwhile, he does concede that automated vulnerability scanning tools aren’t new, but says one key difference is that the Detectify team comes from the world of ethical hacking instead of the world of compliance. “Our tool offers a great UI/UX, high-quality results and the latest security tests thanks to our crowdsourcing,” he adds.

By adding a cryptocurrency exchange, a web version and stock option trading, Robinhood has managed to quadruple its valuation in a year, according to a source familiar with a new round the startup is raising. Robinhood is closing in on around $350 million in Series D funding led by Russian firm DST Global, the source says. That’s just 11 months after Robinhood confirmed TechCrunch’s scoop that the zero-fee stock trading app had raised a $110 million Series C at a $1.3 billion valuation. The new raise would bring Robinhood to $526 million in funding.

The astronomical value growth shows that investors see Robinhood as a core part of the mobile finance tools upon which the next generation will rely. The startup also just proved its ability to nimbly adapt to trends by building its cryptocurrency trading feature in less than two months to make sure it wouldn’t miss the next big economic shift. One million users waitlisted for access in just the five days after Robinhood Crypto was announced.

The launch completed a trio of product debuts. The mobile app finally launched a website version for tracking and trading stocks without a commission in November. In December it opened options trading, making it a more robust alternative to brokers like E*Trade and Scottrade. They often charge $7 or more per stock trade compared to zero with Robinhood, but also give away features that are reserved for Robinhood’s premium Gold subscription tier.

Robinhood won’t say how many people have signed up for its $6 to $200 per month Gold service that lets people trade on margin, with higher prices netting them more borrowing power. That and earning interest on money stored in Robinhood accounts are the startup’s primary revenue sources.

In effect, Robinhood has figured out how to make stock trading freemium. Rather than charge per trade with bonus features included, Robinhood gives away the bare-bones trades and charges for everything else. That could give it a steady, scalable business model akin to Dropbox, which grew by offering small amounts of free storage and then charging for extras and enterprise accounts. From a start with free trades, Robinhood could blossom into a hub for your mobile finance life.

With its daily newsletters designed to keep you in the loop on the latest news and pop culture, TheSkimm has developed a loyal following, and even recruits fans called “Skimm’bassadors” to help spread the word.

That word-of-mouth hype is helping and the startup has seen enough growth to warrant more funding. TheSkimm is announcing a $12 million round led by GV (Google Ventures), with participation from Spanx founder Sara Blakely as well as existing investors like RRE Ventures and Homebrew.

Co-founded in 2012 in New York by former TV news producers Carly Zakin and Danielle Weisberg, the company has expanded beyond its newsletters targeting millennial women and offers subscription products, too. TheSkimm’s app includes a calendar of upcoming news and televised events. It also has podcasts and an e-commerce business.

Revenue is said to have more than doubled year over year since 2016, partly due to the subscriptions, but also due to native advertising and affiliate licensing. The staff has doubled as well and recently moved into a new headquarters.

The latest funding, which adds to the over $16 million already raised, will be used to add more subscription services and also further expand into video and podcasting.

Spotify explained why it’s ditching the traditional IPO for a direct listing on the NYSE on April 3rd today during its Investor Day presentation. With no lockup period and no intermediary bankers, Spotify thinks it can go public without all the typical shenanigans.

Spotify described the rationale for using a direct listing with five points:

List Without Selling Shares – Spotify has plent of money with $1.3 billion in cash and securities, has no debt since it converted that into equity for investors, and has positive free cash flow

Liquidity – Investors and employees can sell on public market and sell at time of their choosing without investors shorting a lockup expiration, while new investors can join in

Equal Access – Bankers won’t get preferred access. Instead, the whole world will get access at the same time. “No underwriting syndicate, no limited float, no IPO allocations, no preferential treatment”.

Transparency – Spotify wants to show the facts about its business to everyone via today’s presentation, rather than giving more info to bankers in closed door meetings

Market-Driven Price Discovery – Rather than setting a specific price with bankers, Spotify will let the public decide what it’s worth. “We think the wisdom of crowds trumps expert intervention”.

Spotify won’t wait for the direct listing, and on March 26th will announce first quarter and 2018 guidance before markets open. It also announced today that there will be no lock-up period, so employees can start selling their shares immediately. This prevents a looming lock-up period expiration that can lead to a dump of shares on the market that sinks the price from spooking investors.

It’s unclear exactly what Spotify will be valued at on April 3rd, but during 2018 its shares have traded on the private markets for between $90 and $132.50, valuing the company at $23.4 billion at the top of the range. The music streaming service now has 159 million monthly active users (up 29 percent in 2017) and 71 million paying subscribers (up 46 percent in 2017.

During CEO Daniel Ek’s presentation, he explained that Spotify emerged as an alternative to piracy by convenience to make paying or ad-supported access easier than stealing. Now he sees the company as the sole leading music streaming service that’s a dedicated music company, subtly throwing shade at Apple, Google, and Amazon. “We’re not focused on selling hardware. We’re not focused on selling books. We’re focused on selling music and connecting artists with fans” said Ek.

Head of R&D Gustav Soderstrom outlined Spotify’s ubiquity strategy, opposed to trying to lock users into a “single platform ecosystem”. He says Spotify does “what’s best for the user and not for the company, and trying to solve the users’ problems by being everywhere.” That’s more shade for Apple, who’s HomePod only works with Apple Music despite customers obviously wishing they could play other streaming services through it. By now being baked into a wide range of third-party hardware through the Spotify Connect program, Soderstrom says Spotify gets a more holistic understanding of its listeners. He declared that Spotify has 5X as much personalization data as its next closest competitor, and that allows it to know what to play you next. He cheekily calls this “self-driving music”.

Wall Street loves a two-sided marketplace, so Spotify is positioning itself in the middle of artists and fans, with each side attracting the other. It’s both selling music streaming services to listeners, and selling the tools to reach and monetize those listeners to musicians. Ek discussed the flywheel that drives Spotify’s business, explaining that the more people discover music, the more they listen, and the more artists that become successful on the platform, and the more artists will embrace the platform and bring their fans.

Yet with music catalogues and prices mostly similar across the industry, Spotify will have to depend on its personalized recommendations and platform-agnositic strategy to beat its deep pocketed competitors. Music isn’t going away, so whoever can lock in listeners now at the dawn of streaming could keep coining off them for decades. That’s why Spotify not raising cash for marketing through a traditional IPO is a strange choice. But with its focus on playlists and suggestion data, Spotify could build melodic handcuffs for its listeners who wouldn’t dream of starting from scratch on a competitor.

Another massive financing round for an AI chip company is coming in today, this time for SambaNova Systems — a startup founded by a pair of Stanford professors and a longtime chip company executive — to build out the next generation of hardware to supercharge AI-centric operations.

SambaNova joins an already quite large class of startups looking to attack the problem of making AI operations much more efficient and faster by rethinking the actual substrate where the computations happen. The GPU has become increasingly popular among developers for its ability to handle the kinds of lightweight mathematics in very speedy fashion necessary for AI operations. Startups like SambaNova look to create a new platform from scratch, all the way down to the hardware, that is optimized exactly for those operations. The hope is that by doing that, it will be able to outclass a GPU in terms of speed, power usage, and even potentially the actual size of the chip. SambaNova today said it has raised a massive $56 million series A financing round co-led by GV and Walden International, with participation from Redline Capital and Atlantic Bridge Ventures.

SambaNova is the product of technology from Kunle Olukotun and Chris Ré, two professors at Stanford, and led by former Oracle SVP of development Rodrigo Liang, who was also a VP at Sun for almost 8 years. When looking at the landscape, the team at SambaNova looked to work their way backwards, first identifying what operations need to happen more efficiently and then figuring out what kind of hardware needs to be in place in order to make that happen. That boils down to a lot of calculations stemming from a field of mathematics called linear algebra done very, very quickly, but it’s something that existing CPUs aren’t exactly tuned to do. And a common criticism from most of the founders in this space is that Nvidia GPUs, while much more powerful than CPUs when it comes to these operations, are still ripe for disruption.

“You’ve got these huge [computational] demands, but you have the slowing down of Moore’s law,” Olukotun said. “The question is, how do you meet these demands while Moore’s law slows. Fundamentally you have to develop computing that’s more efficient. If you look at the current approaches to improve these applications based on multiple big cores or many small, or even FPGA or GPU, we fundamentally don’t think you can get to the efficiencies you need. You need an approach that’s different in the algorithms you use and the underlying hardware that’s also required. You need a combination of the two in order to achieve the performance and flexibility levels you need in order to move forward.”

While a $56 million funding round for a series A might sound massive, it’s becoming a pretty standard number for startups looking to attack this space, which has an opportunity to beat massive chipmakers and create a new generation of hardware that will be omnipresent among any device that is built around artificial intelligence — whether that’s a chip sitting on an autonomous vehicle doing rapid image processing to potentially even a server within a healthcare organization training models for complex medical problems. Graphcore, another chip startup, got $50 million in funding from Sequoia Capital, while Cerebras Systems also received significant funding from Benchmark Capital.

Olukotun and Liang wouldn’t go into the specifics of the architecture, but they are looking to redo the operational hardware to optimize for the AI-centric frameworks that have become increasingly popular in fields like image and speech recognition. At its core, that involves a lot of rethinking of how interaction with memory occurs and what happens with heat dissipation for the hardware, among other complex problems. Apple, Google with its TPU, and reportedly Amazon have taken an intense interest in this space to design their own hardware that’s optimized for products like Siri or Alexa, which makes sense because dropping that latency to as close to zero as possible with as much accuracy in the end improves the user experience. A great user experience leads to more lock-in for those platforms, and while the larger players may end up making their own hardware, GV’s Dave Munichiello — who is joining the company’s board — says this is basically a validation that everyone else is going to need the technology soon enough.

“Large companies see a need for specialized hardware and infrastructure,” he said. “AI and large-scale data analytics are so essential to providing services the largest companies provide that they’re willing to invest in their own infrastructure, and that tells us more investment is coming. What Amazon and Google and Microsoft and Apple are doing today will be what the rest of the Fortune 100 are investing in in 5 years. I think it just creates a really interesting market and an opportunity to sell a unique product. It just means the market is really large, if you believe in your company’s technical differentiation, you welcome competition.”

There is certainly going to be a lot of competition in this area, and not just from those startups. While SambaNova wants to create a true platform, there are a lot of different interpretations of where it should go — such as whether it should be two separate pieces of hardware that handle either inference or machine training. Intel, too, is betting on an array of products, as well as a technology called Field Programmable Gate Arrays (or FPGA), which would allow for a more modular approach in building hardware specified for AI and are designed to be flexible and change over time. Both Munichiello’s and Olukotun’s arguments are that these require developers who have a special expertise of FPGA, which a sort of niche-within-a-niche that most organizations will probably not have readily available.

Nvidia has been a massive benefactor in the explosion of AI systems, but it clearly exposed a ton of interest in investing in a new breed of silicon. There’s certainly an argument for developer lock-in on Nvidia’s platforms like Cuda. But there are a lot of new frameworks, like TensorFlow, that are creating a layer of abstraction that are increasingly popular with developers. That, too represents an opportunity for both SambaNova and other startups, who can just work to plug into those popular frameworks, Olukotun said. Cerebras Systems CEO Andrew Feldman actually also addressed some of this on stage at the Goldman Sachs Technology and Internet Conference last month.

“Nvidia has spent a long time building an ecosystem around their GPUs, and for the most part, with the combination of TensorFlow, Google has killed most of its value,” Feldman said at the conference. “What TensorFlow does is, it says to researchers and AI professionals, you don’t have to get into the guts of the hardware. You can write at the upper layers and you can write in Python, you can use scripts, you don’t have to worry about what’s happening underneath. Then you can compile it very simply and directly to a CPU, TPU, GPU, to many different hardwares, including ours. If in order to do work you have to be the type of engineer that can do hand-tuned assembly or can live deep in the guts of hardware there will be no adoption… We’ll just take in their TensorFlow, we don’t have to worry about anything else.”

(As an aside, I was once told that Cuda and those other lower-level platforms are really used by AI wonks like Yann LeCun building weird AI stuff in the corners of the Internet.)

There are, also, two big question marks for SambaNova: first, it’s very new, having started in just November while many of these efforts for both startups and larger companies have been years in the making. Munichiello’s answer to this is that the development for those technologies did, indeed, begin a while ago — and that’s not a terrible thing as SambaNova just gets started in the current generation of AI needs. And the second, among some in the valley, is that most of the industry just might not need hardware that’s does these operations in a blazing fast manner. The latter, you might argue, could just be alleviated by the fact that so many of these companies are getting so much funding, with some already reaching close to billion-dollar valuations.

But, in the end, you can now add SambaNova to the list of AI startups that have raised enormous rounds of funding — one that stretches out to include a myriad of companies around the world like Graphcore and Cerebras Systems, as well as a lot of reported activity out of China with companies like Cambricon Technology and Horizon Robotics. This effort does, indeed, require significant investment not only because it’s hardware at its base, but it has to actually convince customers to deploy that hardware and start tapping the platforms it creates, which supporting existing frameworks hopefully alleviates.

“The challenge you see is that the industry, over the last ten years, has underinvested in semiconductor design,” Liang said. “If you look at the innovations at the startup level all the way through big companies, we really haven’t pushed the envelope on semiconductor design. It was very expensive and the returns were not quite as good. Here we are, suddenly you have a need for semiconductor design, and to do low-power design requires a different skillset. If you look at this transition to intelligent software, it’s one of the biggest transitions we’ve seen in this industry in a long time. You’re not accelerating old software, you want to create that platform that’s flexible enough [to optimize these operations] — and you want to think about all the pieces. It’s not just about machine learning.”

Over the last several years, social media has become a critical and central way for businesses to communicate, and market to, their customers. Now, one of the startups that helped spearhead this trend has raised a round of growth funding to expand its horizons. Hootsuite, the Vacouver-based social media management company that counts some 16 million businesses as customers, said today that it has raised $50 million in growth capital — specifically through a credit financing agreement — from CIBC Innovation Banking.

We asked Ryan Holmes, the co-founder and CEO, for details about its valuation and funding, and said that it will be used for more acquisitions in the near future, and with it the valuation is unchanged.

“We opted for to go with non-dilutive credit at this point and found a great partner and terms in CIBC,” he wrote in an email. “The company is cash flow positive and the facility will primarily be reserved for M&A purposes. There is no associated valuation, however our latest 409a is up from last year and growth is very strong.”

Notably, the last time Hootsuite raised money — way back in 2014 — the company was already valued at $1 billion. For some context, at the time it had 10 million businesses as customers, and today it has 16 million including what it says is 80 percent of the Fortune 1000, so it’s likely that its valuation has grown as well.

“This financing is a testament to the strong fundamentals behind Hootsuite and our ongoing commitment to innovation and growth as the clear leader in social media management,” said Greg Twinney, CFO of Hootsuite, in a statement. “The additional capital will help us scale even faster to bring the most innovative products and partnerships to market globally and help our customers strategically build their brands, businesses and customer relationships with social.”

The funding, according to the release, will also be used to expand its business in Asia Pacific, Europe and Latin America. It also plans to add in more tools to serve the needs of specific verticals like financial services, government and healthcare.

You may not know the name Hootsuite but you might recognise its mascot — an owl — and more specifically its corresponding shortened link — it starts with ‘ow.ly’ — that is used a lot on Twitter, the social network that gave Hootsuite its first customers and ubiquity.

Things have moved along quite a bit since those early days, when Hootsuite first started as a side project for Holmes, who himself was running a marketing and advertising agency when he started it.

Social media is now the fastest-growing category for marketing spend — partly because of the popularity of social networking services like Facebook, Snapchat and Twitter; and partly because “eyeballs” can be better tracked and quantified on these networks over more legacy channels like print and outdoor ads. At the same time, presenting yourself as a business on a social network is getting harder and harder. Sites like Facebook are focused on trying to improve engagement, and that is leading it to rethink how it shares and emphasizes posts that are not organically created by normal people. On the other side, we’re seeing a new wave of privacy and data protection regulation come in that will change how data can be used across and within these sites.

All of this means that Hootsuite, and others that it competes with, need to get a lot smarter about what it offers to its customers, and how it offers it.

Starting as a modest tool that plugged into Twitter, Hootsuite itself now integrates with just about all of the major social platforms, most recently finally adding Instagram earlier this month. Its customers use a dashboard to both monitor a variety of social media platforms to track how their companies are being discussed, and also to send out messages to the world. And they now use that dashboard and Hootsuite for a growing array of other purposes, from placing ads to content marketing to analytics across an increasing number of platforms — a range of services that Hootsuite has developed both in-house and by way of acquisition.

One challenge that Hootsuite has had over the years has been the company’s focus on the freemium model, and how to convert its initially non-paying users into paying tiers with more premium offerings. Some of that expansion into new services appears to have helped tip the balance.

“In the past year, Hootsuite has seen tremendous growth from acquisitions like AdEspresso, to strategic partnerships with market leaders such as Adobe, to recognitions such as being named a leader in the Forrester Wave and G2 Crowd,” said Holmes in a statement. “This financing allows Hootsuite in continuing to create strong value for customers looking to unlock the power of social.”

Another challenge has been the fundamental fact that Hootsuite relies on third parties to essentially “complete” its offering: Hootsuite offers analytics and tools for marketing, but still needs to connect into social networks and their data pools in order to do that.

This makes the company somewhat dependent on the whims of those third parties. So, for example, if Twitter decides to either increase the fees it charges to Hootsuite, or tries to offer its own analytics and thereby cuts off some of Hootsuite’s access, this impacts the company.

One solution to this is to continue to integrate as many other platforms as possible, to create a position where its stronger because of the sum of its parts. Unsurprisingly, Hootsuite also says that some of the funding will be used to increase its partnerships and integrations.

More generally, we are seeing a trend of consolidation in the area of social media management, as several smaller, and more focused solutions are brought together under one umbrella to improve economies of scale, and also to build out that “hub” strategy, becoming more indispensable, by virtue of providing so much utility in one place.

As part of that trend, we’ve seen two of Hootsuite’s rivals, Sprinklr and Falcon.io (not an owl but another bird of prey), also grow by way of a spate of acquisitions.

Drover, a London-based startup that lets you take out a “car subscription” as an alternative to car ownership, has picked up £5.5 million in seed funding. The round was led by VC firms Cherry Ventures, Partech and BP Ventures (the venture arm of BP), and adds to an earlier £2 million ‘pre-seed’ investment from Version One, and Forward Partners.

Founded by Felix Leuschner (CEO) and Matt Varughese (CTO) in late 2015 and subsequently launched the following January, Drover has built what it describes as a Mobility-as-a-Service platform, giving you access to a car wrapped up in a single monthly subscription. This includes the vehicle itself, insurance, road tax, maintenance and breakdown cover. In addition, users can swap, upgrade or downgrade their car monthly or just cancel altogether, without any long-term commitment or steep upfront payments, says the startup.

Of course, you might think that sounds just like existing car rental offerings, except Drover is designed to be a rolling monthly contract, or for 6 months or longer. In other words, mid to long term rentals, which it sees as a gap in the market and competing more against an outright car purchase or taking credit via a longterm car lease or hire-purchase.

More broadly, Drover says it is hoping to tap into macro trends of the sharing economy, which affords an asset-light and on-demand lifestyle (yes, really!). In terms of how this breaks down into actual customers, Drover’s CEO cites young families who value flexibility as their circumstances change, “life-style driven premium customers” who may want a convertible in the summer and an SUV in the winter, and “convenience-oriented customers” who are drawn to Drover’s all-inclusive and hassle-free package compared to the broken and fragmented user experience of traditional car ownership.

The startup has elected to operate a marketplace model, too, meaning that it doesn’t own any cars or have to shoulder the capital cost of inventory. Instead it currently works with 100 fleet partners to provide a selection of new and used vehicles on its platform. Fleet partners are large rental companies like Europcar, Avis Budget Group and Hertz, car dealership groups, and OEMs, which includes a partnership with BMW Group UK. The buy-in from fleet partners is a new way to monetize vehicles that would otherwise be sitting around idle while depreciating.

Meanwhile, Dover says the new funding will be used to scale the business further and invest in its engineering and product team.

“We at Cherry have the thesis that car ownership is going to change fundamentally in the next few years,” Cherry Ventures founding partner Christian Meermann tells me. “Why should consumers actually own a car or lease it for a long period of 3 or 4 years in the times of sharing economy, desire for high flexibility, and fast innovation cycles in the automotive industry? We believe that Drover’s car subscription service will change the whole automotive industry with Drover’s extremely high flexibility, combined with its broad selection of available cars”.

Meermann says he hopes the Drover team will rapidly grow car subscription in the U.K. and beyond. The key to this, he says, is building great tech to power the supply side of the startup’s marketplace (ie making it cost-effective and scalable for fleet partners to onboard and manage inventory), while at the same time “creating tremendous value” for customers on the demand side.

A massive company probably has plenty of engineers on staff and the resources to build a complex backbone of interconnected information that can contain tons of data and make acting on it easy — but for smaller companies, and for those that aren’t technical, those tools aren’t very accessible.

That’s what convinced Howie Liu to create Airtable, a startup that looks to turn what seems like just a normal spreadsheet into a robust database tool, hiding the complexity of what’s happening in the background while those without any programming experience create intricate systems to get their work done. Today, they’re trying to take that one step further with a new tool called Blocks, a set of mix-and-match operations like SMS and integrating maps that users can just drop into their systems. Think of it as a way to give a small business owner with a non-technical background to meticulously track all the performance activity across, say, a network of food trucks by just entering a bunch of dollar values and dropping in one of these tools.

“We really want to take this power you have in software creation and ‘consumerize’ that into a form anyone can use,” Liu said. “At the same time, from a business standpoint, we saw this bigger opportunity underneath the low-code app platforms in general. Those platforms solve the needs of heavyweight expensive use cases where you have a budget and have a lot of time. I would position Airtable making a leap toward a graphical user interface, versus a lot of products that are admin driven.”

Liu said the company has raised an additional $52 million in financing in a round led by CRV and Caffeinated Capital, with participation from Freestyle Ventures and Slow Ventures. All this is going toward a way to build a system that is trying to abstract out even the process of programming itself, though there’s always going to be some limited scope as to how custom of a system you can actually make with what amounts to a set of logic operation legos. That being said, the goal here is to boil down all of the most common sets of operations with the long tail left to the average programmers (and larger enterprises often have these kinds of highly-customized needs).

All this is coming at a time when businesses are increasingly chasing the long tail of small- to medium-sized businesses, the ones that aren’t really on the grid but represent a massive market opportunity. Those businesses also probably don’t have the kinds of resources to hire engineers while companies like Google or Facebook are camping out on college campuses looking to snap up students graduating with technical majors. That’s part of the reason why Excel had become so popular trying to abstract out a lot of complex operations necessary to run a business, but at the same time, Liu said that kind of philosophy should be able to be taken a step further.

“If you look at cloud, you have Amazon’s [cloud infrastructure] EC2, which abstracted the hardware level and you can build on existing machine intelligence,” Liu said. “Then, you get the OS level and up. Containers, Heroku, and other tools have extracted away the operation level complexity. But you have to write the app and modal logic. Our goal is to go a big leap forward on top of that and abstract out the app code layer. You should be able to directly use our interface, and blocks, all these plug and play lego pieces that give you more dynamic functionality — whether a map view or an integration with Twilio.”

And, really, all these platforms like Twilio have tried to make themselves pretty friendly to coding beginners as-is. Twilio has a lot of really good documentation for first-time developers to learn to use their platforms. But Airtable hopes to serve as a way to interconnect all these things in a complex web, creating a relational database behind the scenes that users can operate on in a more simplistic matter that’s still accurate, fast, and reliable.

“Obviously MySQL is great if you want to use code or custom SQL queries to interface with the data,” Liu said. “But, ultimately, you’d never as a business end user consider using literally a terminal-based SQL prompt as the primary interface to and from your data. Certainly you wouldn’t put that on your designs. Clearly you would want some interface on top of the SQL level database. We basically expose the full value of a relational database like Postgres to the end user, but we also give them something equally but more important: the interface on the top that makes the data immediately visible.”

There’s been a lot of activity trying to rethink these sort of fundamental formats that the average user is used to, but are ripe for more flexibility. Coda, a startup trying to rethink the notion behind a word document, raised $60 million, and all this points towards moves to try to create a more robust toolkit for non-technical users. That also means that it’s going to be an increasingly hot space, and especially look like an opportunity for companies that are already looking to host these kinds of services online like Amazon or Microsoft and have the buy-in from those businesses.

Liu, too, said that the goal of the company was to go after all potential business cases right away by creating a what-you-see-is-what-you-get one size fits all platform — which is usually called a horizontal approach. That’s often a very risky move, and it’s probably the biggest question mark for the company as there’s an opportunity for some other startups or companies to come in and grab niches of that whole pie in specific areas (like, say, a custom GUI programming interface for healthcare). But Liu said the opportunity for Airtable was to go horizontal from day one.

“There’s this assumption that software has to involve literally writing code,” Liu said. “It’s sort of a difficult thing to extricate ourselves from because we have built so much with writing code. But when you think about what goes into a useful application, especially in the business-to-business internal tools in a company use case which forms the bulk of software that’s consumed in terms of lines of code written, most of them are primarily a relational database model, and the relational database aspect of it is not an arbitrary format.

The first time Waseem Daher, Jessica McKellar, and Jeff Arnold worked together on a startup, they built one that allowed administrators to patch security updates to a system without having to restart it.

So it might come as a bit of a surprise that the next big technical challenge the three MIT graduates want to tackle is bookkeeping . But after selling Ksplice to Oracle back in 2011, it was actually the financial software they had built internally that made the jaws of the finance teams at Oracle drop, Daher said. They had created a continuously-updating internal version of QuickBooks, keeping a close eye on their spending and accounting and not having do hire a bookkeeper to do so, out of pure frustration with the process. And today that’s basically launching as Pilot, a startup that has now raised $15 million in a financing round led by Index Ventures.

“If you look at the history of bookkeeping, it goes back to the 1400s,” Daher said. “Probably the oldest written records were of transactions. Around 1400s, we invented double-entry bookkeeping, a system for how money moves into and out of various accounts of companies. That system, as articulated in 1400 in Venice, is basically still what people do in every American business today. You hire a bookkeeper or bookkeeping firm, you send them all your stuff and they track and produce the set of books. The way it’s done today is the same way it’s done in the 90s, the 40s.”

When a company starts working with Pilot, the actual core experience on the customer side doesn’t really change all that much: they still work with a human on the other end. But the bookkeeper from Pilot is working with the internal tools they have built to bring in the data from the company, organize it and structure it, and produce a set of books that are more accurate than someone might have produced than just doing it by hand. Customers will get the kinds of questions you might expect from a normal bookkeeper as they look to clarify what’s happening, but in the end the process happens much more seamlessly. They can integrate directly with their existing services like Expensify or Gusto (or ask Pilot to help out with that) and then go from there.

That kind of human-software mix is something that’s increasingly common in services businesses — like Pilot — as the tech industry figures out what should be automated and what should still be handled by a person. There are still a lot of things that a person can catch, but there’s also the actual human relationship, which isn’t a kind of repetitive task you’d want to automate with an algorithm. To begin, Pilot isn’t trying to force companies to completely rip out their bookkeeping software and start from scratch, and instead start to collect the electronic information they already have.

“Uber’s like that, the drivers are humans but the software makes them much more effective,” Index Ventures’ Mike Volpi said. “You can see it in a lot of applications where in IT support there’s a few businesses like this, you troubleshoot using software, and when you can’t you fix it pass it to humans. In customer service chats, a lot of times it’s an AI, and when the questions get tricky enough it rolls over to humans. It’s interesting because there are tasks which humans are fundamentally needed and there are tasks that are mundane that software can do and the human can avoid doing. It’s an interesting thesis around this hybrid.”

Prior to Pilot, the team sold another company to Dropbox called Zulip, and spent some time at the company as it continued to scale up (Dropbox is now in the process of going public). Some of the challenge alone was somehow assembling a team that found some fascination with the intersection of accounting, machine learning and working directly with customers, but so far McKellar said that they’ve been able to put one together thus far. And, more importantly, now that they are starting to roll out their service they can start getting some perspective on the industry as a whole.

“I think people can get motivated by almost any problem if you know you’re tackling a big problem for many people,” McKellar said. “But there’s quite a lot of subtlety to what we’re building. The rules and principles of bookkeeping are well define but the real world is really messy, and designing the right systems to automate bookkeeping at scale is actually a tricky thing. We have an incredible engineering team that is able to tackle this with the right mindset it. The analogy you can draw is self-driving cars — that’s a system normally done by a human, everyone understands what it takes to drive a car, what actions you should take. It’s difficult for people to put into words, what are the rules given a set of inputs, but it needs to work and be reliable.”

As more and more of this information comes in, and more and more companies start to work with Pilot, they can start spotting trends in the industry. For example, if a 17th SaaS business with a similar business model to other Pilot companies signs up, they could down the line take a look at their info and spot potential discrepancies based on anonymized trend data picked up from other comparables in the industry — or do a better job of spotting inefficiencies or others. And there are some obvious funnels for this already, like getting the right information for tax purposes to accountants.

There’s going to be a lot of increasing activity in this space, though. Already you’re seeing some funded projects like botkeeper, which are looking to find some ways to automate a bookkeeping service. There’s nothing quite so formalized and an obvious tool that looks to take out QuickBooks (and, again, a lot of these seem to be playing nice for now), and there’s always the chance that Intuit could try to take on the space itself. But at the end of the day, Volpi says it’s based on the team that they’ve assembled — and that combination of humans and algorithms — that gives them a shot at succeeding.

“If you look at a fundamental level, the bookkeeping for the doctor’s office or florist, it is really all following the same underlying principles,” McKellar said. “One of the engineering challenges is to build the tooling and systems and software in a way that’s intelligent. It has to be a set of processes that can flexibly accommodate every vertical over time. In some sense this company, why we raised this, was to validate a huge hypothesis — it’s possible to automate bookkeeping at scale across a range of industries.”

Here’s the rest of the investors in this round, since it’s a long list: Patrick and John Collison, Drew Houston, Diane Greene, Frederic Kerrest, Hans Robertson, Adam D’Angelo, Paul English, Howard Lerman, Joshua Reeves, Tien Tzuo, as well as many others.

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Tandem, the U.K. challenger bank co-founded by fintech veteran Ricky Knox, continues to be on a shopping spree. Following the purchase of Harrods Bank, the banking arm of the famous luxury British department store, the company is acquiring Pariti, a money management app that has garnered 95,000 users. Terms of the deal remain undisclosed, although […]

Tandem, the U.K. challenger bank co-founded by fintech veteran Ricky Knox, continues to be a shopping spree. Following the purchase of Harrods Bank, the banking arm of the famous luxury British department store, the company is acquiring Pariti, a money management app that has garnered 95,000 users. Read More